The curious case of Christy Friedgram

Christy Friedgram Industry is a firm based in Tiruchengode. The firm had been supplying dal and eggs in various states. This firm was black-listed by the Karnataka government for supplying sub-standard materials. The Karnataka lok ayuktha unearthed the scam by Christy and ordered registration of a criminal case against Christy, following which the tender awarded to them was cancelled.

The firm’s fortunes rose when the TN government under Jayalalitha decided to centralize egg procurement in May 2012. Tender conditions were tweaked to the effect only Christy Friedgram were only eligible to participate.

The Income Tax department in July 2018, launched a meticulous search operation against Christy group of companies. Christy’s office was situated in a village in Thiruchengode. Mounting surveillance was not easy. Sources in Income Tax department say, locals were hired to conduct recce on Christy before the search operations commenced. Sources add, except a couple of officers, no one in the department knew about the impending operation. The searches went on for a week and IT unearthed tax evasion of more than 1350 crores. The searches not only revealed tax evasion, but also bribe trail to several officers and politicians.

In November 2018, The Hindu reported large scale bribery by Christy. The report said, “The documents that we have seized include the book of accounts for many years that show payments made to politicians, bureaucrats and others, mostly in code, over a period of time. In a few cases, the names of the family members of bureaucrats who held key posts figured in the list of beneficiaries. Payments to the tune of a few crores of rupees were made to some beneficiaries through online bank transfers. The rough estimate of the kickbacks works out to ₹2,400 crore”.

As the probe against Christy intensified, Christy tried to stifle the probe through Madras High Court. The firm filed a petition with an unusual prayer. In a Writ Petition Christy sought orders that two senior IRS officers who were heading the probe against Christy were leaking information to the media and that IRS officers Rohan Raj and Jeya Raghavan should not handle the probe against Christy. Though neither the Hindu report nor other media reports quoted either of these officers, Christy alleged that these two officers were responsible for news in media. Justice T.Raja, before whom this matter came up, termed the media stories as “trial by media” and gagged the department from revealing any information with regard to the probe on Christy. Apart from this, Christy filed around 10 writ petitions with an intention to frustrate the Income Tax authorities. The department promptly filed counters in all the writ petitions. Out of the ten writ petitions 3 were disposed off and 7 were pending. All before Justice Raja.

Justice T.Raja

Though the writ petitions were pending before the High Court from November 2018, Justice Raja suddenly showed an urgency in deciding the Christy’s cases in the month of January. Sources say, the Income Tax department was not given adequate time to advance their arguments. From 25th January 2019, senior counsels on behalf of Christy argued continuously for four days. Income Tax department mentioned before the Court that a senior counsel named Shrivatsava has been engaged and he has to come from Delhi and sought an adjournment till 7th February 2019. However, the plea was turned down and the department was asked to commence and conclude their arguments before 31st January 2019. On 29th January 2019, Susie Vargheese, Principal Director of Income Tax department filed a Memo before Justice Raja seeking adjournment. In the memo, the senior IRS officer had listed out the difficulties faced by the department.

“Hearing was completed on day to day basis without the consent and convenience of the Department’s standing counsel as he was to appear on other courts also on those days. On 24th January 2019, the department’s t counsel had department cases and appeared before Hon’ble 2nd Bench, 4th Bench and 8th Bench and also before single Judges. However arguments (in Christy case) were going on. Though the department officials and Junior Standing Counsel was present in the court, considering the volume of the case and complexities involved, the hearing ought to have been deferred at least till the senior counsel could attend the hearing, but it was not done.

7 Writ Petitions were argued by 4 senior counsels and one advocate. The department is yet to formulate the arguments of the petitioner counsel and to instruct the department counsel. Further additional counter and reply to the rejoinder also have to be prepared and therefore to prepare for the case and to defend the case the department needs 15 days time. Huge revenue implication of 1350 is involved in this case and the judgement to be rendered will have a barring on all the cases all over India.”

This Memo filed by the Income Tax department incensed Justice Raja, who came down heavily on the department. While the IT department alleges there is tax evasion to the tune of 1350 crores, Justice Raja said in his order, the claim is without basis. It is for the department to assess the quantum of tax evasion and court cannot enter into executive’s shoes. Justice Raja also laments that Christy Fried Gram’s business has come to a standstill and it is crippled due to IT authorities. According to the Hindu report, Justice Raja has referred the matter to Chief Justice for orders whether he can continue to hear the case.

The anxiety of Justice Raja to continue to hear Christy’s cases was due to the circular issued by former Chief Justice Indira Banerjee in March last year. As per the circular, Upon change of roster, part-heard matters shall stand released and be placed before the Bench as per the roster. Justice Raja’s portfolio would be changed after 31st January 2019. In all likelihood, it can only be inferred that keeping this aspect in mind Justice T.Raja pressurized the Income Tax department to wind up their arguments 31st March 2019.

Several lakhs of cases are pending before the High Courts and thousands of litigants including senior citizens throng the court seeking justice. If one visits the High Court, serpentine que of litigants in the CISF security counters can be seen. Several litigants visit the courts for years together. Several under trial prisoners languish in prisons without proper legal aid. But sadly for Justice Raja, delivering justice to a fraudulent firm which is facing criminal case in Karnataka for criminal conspiracy and cheating has become a priority.